Reply to: Writing this to my client, in advance of April 2020

[WordIsBond]

The idea that you can ask/force the end client to "rule this inside" is perhaps fanciful?

An end client will have a way of working that suits them. If they can make small changes to how a role is supervised, directed and controlled, AND STICK TO IT, then perhaps this can be achieved.

Given what OP has said, that he thinks it is clearly outside, he doesn't even have any one individual to discuss it with at client, is direct rather than through an agent, and works entirely off-site, I'd guess it should be outside. If there's no one individual supervising and he's off-site it shouldn't be hard to argue he's not under SDC.

I'm guessing though that larger end clients would be less accommodating as they probably have large scale working populations and therefore relatively fixed policies and procedures?

OP doesn't sound like that's his case, if it's a larger client he's probably plugged in with a division that has a measure of autonomy in who they contract with and how (otherwise he wouldn't be direct and he wouldn't be entirely WFH).

Asking an end client to "back me or sack me" is a brave move.

I wouldn't characterise my suggestion that way. It would be more like, 'You are going to have to guarantee you aren't going to do something stupid and stick me with a big historical tax liability along the way, or I'm walking.' The brave thing (I'd call it foolhardy) would be to stick around and face an inside determination, knowing that makes him a sitting duck for HMRC for historical contracts. Better to sit on the bench for a few months, even if he ends up having to take an inside contract somewhere else, then face a huge historical tax liability.

[webberg]

I'd start discussions early (like probably mid-January) and tell them you'll have to leave by end of February if they are going to rule this inside. You've got a lot of potential liability.

The idea that you can ask/force the end client to "rule this inside" is perhaps fanciful?

An end client will have a way of working that suits them. If they can make small changes to how a role is supervised, directed and controlled, AND STICK TO IT, then perhaps this can be achieved.

I'm guessing though that larger end clients would be less accommodating as they probably have large scale working populations and therefore relatively fixed policies and procedures?

Asking an end client to "back me or sack me" is a brave move.

[WordIsBond]

I haven't argued it yet. I'll wait to see what happens closer to the time.

I'd start discussions early (like probably mid-January) and tell them you'll have to leave by end of February if they are going to rule this inside. You've got a lot of potential liability.

[ChimpMaster]

Well in the end I didn't let the tail wag the dog.

I wasn't expecting much of an extension but I have been offered 12 months, though the client did make it clear that I am on a zero day notice period

I haven't argued it yet. I'll wait to see what happens closer to the time.

[Paralytic]

To those saying that I should speak with them face to face, I've already mentioned that I don't work on site and don't have a specific contact to speak to about this (no one knowledgeable or anyone who would care). And the legal team are based abroad.

Why do you assume that people who advised speaking to them meant only face-to-face? I'd phone them first, even if abroad. And if you can't get a name, email first asking for a name and send a more generic email saying what you wish to speak about. The response from that might help you understand where they are in their thought process (if anywhere).

It will be interesting to hear if an off-shore legal team are up to date with the intricacies of UK tax law...

[ChimpMaster]

Hmm. Direct to client.

What's their payment record? Do they pay within a week, a month, three months?

I'd probably write a letter like this, I think it is a good idea, but of course it depends on the people involved and how they'll react.

If they aren't ready and don't want to think about it then their payment schedule comes into play. Since you are direct, you could negotiate an extension to mid-March if they'd commit to paying before April. In fact, you could do a full six months if they'd promise to pay before the sixth, and that would let them kick this down the road for six months. Otherwise, they pretty much have to think about it now. I've got clients that I could get that kind of turnaround if it were to their benefit. It could never happen with an agent in between but being direct it just might.

The best plan is to guide them to an outside determination, obviously, but failing that if you can defer it by taking an extension for which you will have full payment before 6 April is an option. That also has the advantage of being able to take advantage of the slim possibility that the new regime could kill this monstrosity.

This is where I am veering towards, perhaps even a 5 month extension. Payment terms are 2 weeks and these are met most of the time. It would be the easiest option to take right now and I don't have to deal with it right now then. I'll negotiate the extension and then give them a nudge in a few months.

To those saying that I should speak with them face to face, I've already mentioned that I don't work on site and don't have a specific contact to speak to about this (no one knowledgeable or anyone who would care). And the legal team are based abroad.

We're all hoping that this whole private sector implementation will be rescinded, but of course we know it's unlikely given how hard-nosed the government are. So I wouldn't base any forward planning on Hope alone. Best to start thinking about it now so that you're in a better position come April.

[TheInvoicer]

You need to talk to them rather e mail or letter in my view. Especially if they have no clue,


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[WordIsBond]

Hmm. Direct to client.

What's their payment record? Do they pay within a week, a month, three months?

I'd probably write a letter like this, I think it is a good idea, but of course it depends on the people involved and how they'll react.

If they aren't ready and don't want to think about it then their payment schedule comes into play. Since you are direct, you could negotiate an extension to mid-March if they'd commit to paying before April. In fact, you could do a full six months if they'd promise to pay before the sixth, and that would let them kick this down the road for six months. Otherwise, they pretty much have to think about it now. I've got clients that I could get that kind of turnaround if it were to their benefit. It could never happen with an agent in between but being direct it just might.

The best plan is to guide them to an outside determination, obviously, but failing that if you can defer it by taking an extension for which you will have full payment before 6 April is an option. That also has the advantage of being able to take advantage of the slim possibility that the new regime could kill this monstrosity.

[northernladuk]

What relationship do you have with the client? I'd speak to them first before sending this - then say you'll follow it up with an email.

This for me. Have a couple of chats and see how the land lies first. An official looking mail like that (if was better worded) looks too heavy handed straight off the bat for me

[jamesbrown]

You guys think it's a bad idea, or too early perhaps?

I don't think it's necessarily a bad idea, worded correctly, and not too early (although it might be for them ). The sooner you can inform yourself (and perhaps even them), the better.

[jamesbrown]

These are changes to the Intermediaries Legislation which will take effect from ...

IR35 exists and has done so for 20 years - your letter gives the impression that IR35 is being introduced.

Agree with that.

Also, before you worry about any of this, have your confirmed their status w/r to the Companies Act definition of a small business? It sounds like they are medium or large ("legal team"), but the whole approach is moot if they qualify as small.

[BrilloPad]

I really don't think the client has a clue about April 2020 so I'm taking charge.

You guys think it's a bad idea, or too early perhaps?

IMO its an incredibly bad idea. They don't have a clue. It does not affect you personally - its their lookout.

I would wait until they raise the "issue" then decide what to do.

But thats just my take on it.

[mudskipper]

Does this look OK, is it comprehensive or would you add/remove anything?

-------------------------------

The government is introducing changes into U.K. law that we all need to be aware of, so I thought it best to discuss sooner rather than later. These changes are the Intermediaries Legislation (otherwise known as “off-payroll working rules” or “IR35”) and will be introduced by government in April 2020 but can impact agreements arranged prior to this.

These are changes to the Intermediaries Legislation which will take effect from ...

IR35 exists and has done so for 20 years - your letter gives the impression that IR35 is being introduced.

[ChimpMaster]

My relationship is good/open but not direct to the legal team. And of course I want to put things in writing. I don't work on-site (any more) so I have little face-to-face chance to discuss this, but more importantly there is no one specific that I could discuss this with at the client.

I am direct to client - no agency involved. Reason for writing now is that the contract is due for renewal and I'd rather the IR35 issue be sorted out earlier rather than later.

If the client does renew, they are likely to offer a 6 month contract and this will take mean getting paid into April, and therefore liable for the in/out IR35 determination.

I really don't think the client has a clue about April 2020 so I'm taking charge.

I will wait until the Treasury's Spending Round on Sept 4th before sending this email, but I'm not expecting any changes to this policy then.

You guys think it's a bad idea, or too early perhaps?

[BrilloPad]

What has prompted you to think about writing this? Are ClientCo aware of the 2020 changes?

I take it there is no agency involved?